Raleigh’s Union Station may cost $10M more than expected

The $80 million transit hub planned for downtown Raleigh will likely cost $10 million more than expected, city planners announced Tuesday.

And Raleigh leaders will soon have to figure out how to address the city’s portion of the tab, $2.79 million more than budgeted.

Federal, state and local authorities budgeted $44.7 million for the first phase of Union Station, which they hope to open in 2017 on Martin Street in downtown’s warehouse district.

But a jump in the cost of concrete, steel and site preparation pushed the cost to $54.7 million, Richard Kelly, Raleigh’s interim public works director, told the City Council on Tuesday. The cost is also higher than expected because there wasn’t as much competition as expected in the bidding process, Kelly said.

Phase One of Union Station includes 28 projects that planners put out to bid. But many local subcontractors were unavailable because they’re working on other projects in the region, Kelly said.

Federal and state authorities are expected to pay for the cost overruns for which they’re responsible, but on Tuesday it wasn’t immediately clear how they would achieve that, he said.

As for Raleigh, the City Council is expected to address its $2.79 million budget gap on Nov. 3. The council seemed divided during a work session on the issue Tuesday.

The city has an excess of $18 million in its general fund, and two council members want to use that money to bridge the funding gap.

“I think this is one of the most successful things we’re gonna do in downtown Raleigh … and we need to get it done,” Councilman John Odom said.

Investing what’s needed to make Union Station a state-of-the-art facility would send a message to developers about the quality of projects they want to see in Raleigh, Councilman Wayne Maiorano said.

“Take note: here are two Republicans willing to spend all the dollars needed,” Maiorano said in a joking tone. He and Odom, who will leave the council when their terms end in December, are the only registered Republicans on the nonpartisan council.

The city could save $2.53 million by postponing construction on a plaza, canopy, rooftop terrace and smaller amenities. Kelly and Steve Schuster, the project’s chief architect, advised the council against postponing plaza construction. Schuster described it as the front door of the station.

“Ultimately it will pay back dividends,” he said.

By building the plaza and postponing the other projects, the city could save $1.2 million.

Council members Kay Crowder, Bonner Gaylord and Russ Stephenson favor a plan to save about $929,000 by postponing construction of the canopy.

Additional cost overruns are possible if crews encounter problems during construction, Crowder pointed out.

“There will be more cost change orders that will come down the pike that we don’t even know about yet,” she said.

Postponing the canopy is the simplest way to save money because construction crews can easily install it after the rest of the station is built, Kelly said. It’s unclear how Mayor Nancy McFarlane and Councilman Eugene Weeks stand on address the issue. They were absent from Tuesday’s meeting.

Councilwoman Mary-Ann Baldwin, meanwhile, didn’t offer her opinion because she has ties to companies involved with the construction process and is recusing herself. She did suggest, though, that the council could seek to fund construction of the canopy through a public-private partnership. The city will consider that option but doesn’t have a system for reaching out to the community and striking deals quickly, said Ruffin Hall, the city manager.

This story was originally published October 20, 2015 at 7:20 PM with the headline "Raleigh’s Union Station may cost $10M more than expected."